A compromise between the two sides was reached after all-night talks, employer delegation leader Horst-Werner Maier-Hunke told journalists.
Employers and IG Metall negotiated for almost 15 hours beginning on Wednesday evening in a second round of talks over a new wage contract.
“There's nothing more ambitious than securing jobs during the biggest economic crisis of the last 80 years,” said IG Metall head Berthold Huber.
The agreement includes a pay freeze with a one-time payment of €320 for 2010, with plans to raise wages by 2.7 percent in April 2011. The two sides also agreed early in the discussions to secure jobs for employees in Germany's most populous state by lowering the costs of a reduced working hours programme. To avoid laying workers off companies will be able to reduce their hours to 28 hours per week for six months.
Metal industry employers' group Gesamtmetall President Martin Kannegiesser spoke of an “impressive signal of joint crisis management,” adding that the branch had never reached such an agreement so early in negotiations.
The agreement will likely serve as an example for further negotiations with the entire metalworking and electronics industries, which employ some 3.4 million workers in Germany.
For the first time, IG Metall did not take concrete wage increase demands or threats of strike to the negotiation table.
IG Metall leaders in Lower Saxony and Saxony-Anhalt said they would strive to emulate the agreement for their 100,000 members when their negotiations with employers begin on February 25 in Hannover.
Regional head Hartmut Meine called the new wage contract a “good deal in a difficult time.”